{"id":90602,"date":"2026-10-02T19:02:20","date_gmt":"2026-10-02T09:02:20","guid":{"rendered":"https:\/\/www.ic.com\/blog\/?p=90602"},"modified":"2026-10-02T19:02:20","modified_gmt":"2026-10-02T09:02:20","slug":"ic-asia-fundamental-forecast-02-october-2026","status":"publish","type":"post","link":"https:\/\/www.ic.com\/blog\/ic-asia-fundamental-forecast-02-october-2026\/","title":{"rendered":"IC &#8211; Asia Fundamental Forecast | 02 October 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>IC &#8211; Asia Fundamental Forecast | 02 October 2026<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What happened in the U.S. session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The U.S. session was characterized by a tug-of-war between cooler inflation and a surprisingly resilient U.S. economy. The softer-than-expected PCE inflation report initially weighed on the dollar, pushed short-term Treasury yields lower, and reduced expectations for an October Fed rate hike. However, stronger GDP and employment data, combined with rising oil prices linked to the U.S.-Iran conflict, kept longer-term inflation and interest-rate concerns elevated. Gold faced conflicting forces, benefiting from lower rate expectations while simultaneously coming under pressure from elevated Treasury yields and ongoing inflation concerns.<br \/><br \/><strong>What does it mean for the Asia Session?<\/strong><br \/><br \/>Japan\u2019s inflation figures are reinforcing the importance of Bank of Japan policy expectations for the yen, while elevated crude oil prices remain a headwind for many Asian oil-importing currencies. Mainland China will remain closed for the Golden Week holiday, leaving Hong Kong and offshore yuan markets to provide much of the region\u2019s China-related price signals.<br \/><br \/>Later in the day, market attention will shift to the U.S. September employment report. The dollar, Treasury yields, gold, and broader risk assets could see heightened volatility if the data significantly deviates from expectations.<br \/>\u200b<br \/><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Average Hourly Earnings m\/m (12:30 pm GMT)<br \/><br \/>Non-Farm Employment Change (12:30 pm GMT)<br \/><br \/>Unemployment Rate (12:30 pm GMT)<br \/><br \/><strong>What can we expect from the DXY today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The dollar enters Friday with strong momentum, supported by high Treasury yields, resilient U.S. labor-market indicators, and weakness in European currencies. However, softer-than-expected PCE inflation and recent Fed comments have reduced expectations for an immediate October rate hike. The September NFP report is therefore the key catalyst today: markets are looking for roughly 90K jobs and a 4.1% unemployment rate, and a significant deviation from those expectations could produce substantial volatility in USD pairs, gold, and U.S. yields.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) raised the federal funds target range by 25 basis points to 3.75%\u20134.00% at its September 15\u201316, 2026, meeting. The decision was approved unanimously by a 12\u20130 vote, marking a shift from the July meeting, when rates were held at 3.50%\u20133.75%. The Fed said the move was intended to support its dual mandate and promote a more timely return of inflation toward its 2% objective.<\/li>\n\n\n\n<li>The labor market remains relatively resilient. The September FOMC statement said job gains have kept pace with workforce growth and that the unemployment rate has changed little. The Fed continues to monitor employment conditions closely alongside inflation when determining the appropriate path for monetary policy.<\/li>\n\n\n\n<li>Inflation remains above the Federal Reserve&#8217;s 2% target and continues to be a key policy concern. The September decision explicitly noted that inflation remains elevated. The latest projections put median headline PCE inflation at 3.7% for 2026, before falling to 2.3% in 2027, 2.1% in 2028, and 2.0% in 2029. Core PCE inflation is projected at 3.4% in 2026, declining to 2.5% in 2027 and 2.2% in 2028.<\/li>\n\n\n\n<li>Economic activity continues to expand at a solid pace. The Fed highlighted resilient domestic spending, strong productivity growth, and robust capital investment, although uncertainty remains elevated partly because of geopolitical developments. The September projections raised the median 2026 GDP-growth forecast to 2.3%, compared with 2.2% in the June projections.<\/li>\n\n\n\n<li>The September projections show a higher expected policy-rate path than in June. The median projection for the federal funds rate is now 4.1% at the end of 2026, compared with 3.8% in the June projections. The median is projected at 4.1% in 2027, 3.9% in 2028, and 3.6% in 2029. This indicates that policymakers&#8217; projected rate path remains relatively restrictive while inflation is expected to move gradually toward the target.<\/li>\n\n\n\n<li>Chair Kevin Warsh continues to emphasize the importance of returning inflation to 2%. Ahead of the September meeting, Warsh indicated that the Fed would have further work to do if policymakers could not gain sufficient confidence that inflation was moving toward the 2% objective. The September decision subsequently delivered a 25-basis-point hike, while the Committee continued to emphasize its assessment of incoming economic data and risks.<\/li>\n\n\n\n<li>The September economic projections show a more balanced growth outlook but continued inflation risks. The median unemployment forecast is 4.1% for 2026 and 2027, while the Fed projects GDP growth of 2.3% in 2026 and 2.4% in 2027. At the same time, PCE inflation is expected to remain substantially above target through 2026 before moving closer to 2% over subsequent years.<\/li>\n\n\n\n<li>The next meeting is scheduled for 27 to 28 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bullish&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Gold (XAU)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>Average Hourly Earnings m\/m (12:30 pm GMT)<br \/><br \/>Non-Farm Employment Change (12:30 pm GMT)<br \/><br \/>Unemployment Rate (12:30 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the Gold today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The key focus for gold today is the U.S. September employment report. Gold has received some support from softer inflation and declining expectations for an October Fed hike, but this is being offset by elevated Treasury yields and a strong dollar. If the jobs data comes in weaker than expected, markets could reduce expectations for further Fed tightening, potentially supporting <a href=\"https:\/\/www.tradingview.com\/symbols\/XAUUSD\/?exchange=ICMARKETS\">XAU\/USD<\/a>. Conversely, a strong jobs report could push yields and the dollar higher and create renewed pressure on gold.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><br \/>Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Australian Dollar (AUD)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the AUD today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The RBA&#8217;s 4.60% interest rate and Australia&#8217;s still-high inflation provide some underlying support for the currency, while stronger commodity prices are another positive factor. However, the recent softer inflation reading has reduced near-term expectations for another RBA hike, while a stronger U.S. dollar and higher global bond yields are weighing on AUD\/USD. For traders, AUD\/USD, AUD\/JPY, and AUD\/NZD are likely to remain particularly sensitive to changes in RBA rate expectations, U.S. dollar strength, commodity prices, and developments in China.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The RBA raised the cash rate by 25bps to 4.60% on 29 September, its fourth hike of 2026. The RBA said further tightening remains possible if inflation stays elevated.<\/li>\n\n\n\n<li>July CPI eased to 3.5% year-on-year, but trimmed-mean inflation remained at 3.6%, showing that underlying price pressures are still above the RBA\u2019s 2\u20133% target. August CPI is due on 30 September.<\/li>\n\n\n\n<li>Unemployment increased to 4.6% in August, while employment rose by around 39,000. The labor market is cooling gradually but remains relatively resilient.<\/li>\n\n\n\n<li>Wage growth rose 0.8% quarter-on-quarter and 3.2% year-on-year in Q2 2026. Slower annual wage growth could help reduce inflation pressure, although wage growth remains elevated compared with pre-pandemic levels.<\/li>\n\n\n\n<li>Higher interest rates are weighing on household spending and housing activity. The RBA noted that consumer spending is easing gradually and new housing loans have declined.<\/li>\n\n\n\n<li>Higher global oil prices and Middle East tensions are creating additional inflation risks for Australia. The RBA is also monitoring global growth, China, and commodity prices.<\/li>\n\n\n\n<li>Markets will closely watch August inflation, employment, wages, consumer spending, and global energy prices for clues about the RBA\u2019s next move.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The next meeting is on 2-3 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Kiwi Dollar (NZD)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the NZD today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">NZD remains vulnerable today, with the main drivers being continued US-dollar strength, elevated US yields, domestic political uncertainty, and the contrast between a weak New Zealand labour market and the RBNZ&#8217;s renewed tightening cycle. The RBNZ&#8217;s next meeting on 28 October will be particularly important for NZD because markets are already considering another rate increase. Meanwhile, developments surrounding the November election could add volatility to the currency.<br \/><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.75% at its 2 September 2026 Monetary Policy Statement meeting. The decision was reached by consensus, marking another step in the bank&#8217;s tightening cycle as policymakers seek to bring inflation sustainably back toward the 2% midpoint.<\/li>\n\n\n\n<li>Inflation remains the key reason behind the RBNZ&#8217;s tightening stance. Annual consumer inflation increased to 4.1% in the June 2026 quarter, driven largely by higher fuel prices associated with the Middle East conflict. The RBNZ expects inflation to remain above 3% for the remainder of 2026 before returning to the 1\u20133% target range next year and moving toward the 2% midpoint.<\/li>\n\n\n\n<li>Energy prices and geopolitical developments remain an important upside risk to inflation. Higher petrol and diesel prices have increased transportation and production costs, feeding into prices for goods and services such as food and air travel. The RBNZ remains concerned that renewed increases in energy prices could make inflation more persistent than currently expected.<\/li>\n\n\n\n<li>The RBNZ indicated that further OCR increases may still be required this year, but policy is not on a predetermined path. Future decisions will depend on the balance of risks to medium-term inflation, including inflation expectations, domestic price pressures, economic activity, and the response of households and businesses to tighter financial conditions.<\/li>\n\n\n\n<li>New Zealand&#8217;s economic recovery appears to have resumed, although growth remains uneven. Economic activity was lacklustre during the June quarter as higher fuel costs reduced household purchasing power. However, stronger export prices and resilient demand from trading partners are supporting income growth and investment, particularly in export-oriented sectors.<\/li>\n\n\n\n<li>Household demand and the housing market remain areas of weakness. Weak income growth, job insecurity, and relatively flat house prices continue to weigh on household spending and residential investment, particularly in Auckland and Wellington. The RBNZ nevertheless expects the recovery to strengthen gradually as inflation declines and purchasing power improves.<\/li>\n\n\n\n<li>The labor market remains relatively soft, but the Bank expects conditions to improve as economic activity strengthens. High unemployment and subdued household demand remain a concern, but stronger economic growth should gradually encourage businesses to increase hiring. This creates a delicate balance for the RBNZ between containing inflation and avoiding unnecessary weakness in employment and output.<\/li>\n\n\n\n<li>The RBNZ continues to see strong export performance as an important support for the economy. New Zealand&#8217;s agricultural and other export sectors are benefiting from resilient global demand and strong commodity prices, helping offset weakness in domestic consumption and residential investment.<\/li>\n\n\n\n<li>The next meeting is on 28 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strongly Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Japanese Yen (JPY)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the JPY today?<br \/><br \/><\/strong>The <a href=\"https:\/\/www.tradingview.com\/symbols\/USDJPY\/?exchange=ICMARKETS\">yen <\/a>is caught between two opposing forces today. On one side, the BOJ&#8217;s 1.25% policy rate, stronger manufacturing confidence, and comments from some BOJ policymakers favoring faster tightening provide potential support for the currency. On the other, the market has become less convinced that the BOJ will deliver another immediate hike, while strong U.S. yields, elevated oil prices, and Japan&#8217;s fiscal concerns continue to weigh on the yen.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><br \/><strong>Central Bank Notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The BOJ raised its policy rate by 25 basis points to 1.25% at its September 17\u201318 meeting, the highest level in 31 years. The decision passed 7\u20132.<\/li>\n\n\n\n<li>The BOJ said underlying inflation remains firm and is increasingly consistent with its 2% price-stability target, supported by wage growth and services prices.<\/li>\n\n\n\n<li>Further rate hikes remain possible, but the BOJ will continue to assess wage growth, inflation, economic activity, and financial-market conditions before making additional adjustments.<\/li>\n\n\n\n<li>The Bank continues its gradual reduction of Japanese Government Bond purchases while retaining flexibility to respond if market volatility becomes excessive.<\/li>\n\n\n\n<li>Japan&#8217;s economy continues to expand moderately, supported by domestic demand and business investment, although global trade uncertainty, geopolitical risks, and higher energy costs remain important risks.<\/li>\n\n\n\n<li>Yen weakness remains a key concern, as depreciation can increase imported inflation. The BOJ is closely monitoring exchange-rate movements and their impact on prices and financial conditions.<\/li>\n\n\n\n<li>Governor Kazuo Ueda signalled that the September hike reflects growing confidence that inflation is becoming more sustainable, while the two dissenting members preferred to wait before tightening further.<\/li>\n\n\n\n<li>Looking ahead: The BOJ remains on a gradual normalization path. Future hikes will depend mainly on inflation, wages, domestic demand, and financial conditions rather than a fixed timetable.<\/li>\n\n\n\n<li>The next meeting is on 29 to 30 October 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Weak Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Oil<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><br \/><br \/>No major news event<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the Oil today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Oil on Friday maintains a bullish geopolitical bias, but with significant two-way risk. Immediate upside pressure is coming from rising U.S.-Iran tensions, concerns over potential disruptions in the Middle East and around the Strait of Hormuz, and increasingly tight refined-fuel supplies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, recovering Gulf crude exports and Saudi Arabia\u2019s restored export infrastructure are helping prevent the supply situation from deteriorating further. With Brent around $102 and WTI around $93, the market appears to be balancing renewed geopolitical risks against signs that physical crude flows are recovering.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Strongly Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Risk Warning:<\/strong>&nbsp;Trading in securities involves significant risk. Prices may fluctuate and securities can become entirely valueless. You may incur losses that exceed your potential profits, and in some cases, losses may exceed the amount you have deposited. Securities, futures, options, and contracts for differences are complex financial instruments and are not suitable for all investors. Engaging in such transactions requires a sound understanding of the associated risks. Please read and ensure you fully understand our&nbsp;<a href=\"https:\/\/cdn.ic.com\/uploads\/FSA\/Risk_Disclosure_Notice_FSA.pdf\" target=\"_blank\" rel=\"noopener\">Risk Disclosure<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our leverage is dynamic and may change at any time. Such changes may affect your positions and margin requirements. You are responsible for monitoring your positions and maintaining sufficient margin at all times.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IC &#8211; Asia Fundamental Forecast | 02 October 2026 What happened [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":84953,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-90602","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"_links":{"self":[{"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/posts\/90602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/comments?post=90602"}],"version-history":[{"count":2,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/posts\/90602\/revisions"}],"predecessor-version":[{"id":90630,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/posts\/90602\/revisions\/90630"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/media\/84953"}],"wp:attachment":[{"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/media?parent=90602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/categories?post=90602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ic.com\/blog\/wp-json\/wp\/v2\/tags?post=90602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}